Forex: USD/JPY weakness is just corrective, says BofA Merill Lynch

on Dec 5, 2013
Updated: Oct 21, 2019
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**iNVEZZ.com, Thursday 5 December:**

So far today, the USD/JPY has continued to edge lower from its 28-week high of 103.37, reached during Tuesday’s Asian session.
Despite the recent weakness of the greenback against the Japanese yen, technical strategists at the Bank of America Merrill Lynch continue to see the decline as corrective. While the price action has been “a bit lacklustre” since Tuesday, BofA stays bullish for a retest of May’s peak at 103.74 “ahead of 104.60/105.00” because the pair has held the critical support at 101.75.

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If the price slips below the psychological level of 101.75, this would negate the near-term bullish view, according to chartists at the US investment bank. However, analysts at BofA believe that for a more pronounced decline the short-sellers “need to see a break of 100.62”.


On the stock market front, the Nikkei 225 shed 230.45 points today or 1.5 percent of its price, closing Tokyo trading at 15,177.49. The Japanese blue-chip index is down roughly 4.8 percent from its post-recession high of 15,942.60, set on 2 December.
In the US, the Bureau of Labour Statistics will report the Revised US GDP for Q3 at 13.30 UTC. The released date has been delayed by nine days due to the US government shutdown. Analysts expect an upward revision from the initial estimate of 2.8 percent to annualised growth of 3.0 percent. Economists at Credit Agricole forecast the US to have expanded by 3.1 percent.
Also today, US Factory Orders for October m/m are due out at 15.00 UTC, with market consensus for a decline of 0.9 percent.
Right now, the USD/JPY is trading around 101.95, down 0.34 percent intraday
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